1. Channels of distribution
Presented by,
Manoj k mathew
S4 mba
macfast

2. Channels of Distribution
• A channel of distribution or trade channel is
defined as the path or route along which
goods move from producers or manufacturers
to ultimate consumers or industrial users. In
other words, it is a distribution network
through which producer puts his products in
the market and passes it to the actual users.

3. These channels of distribution are
broadly divided into four types
• Producer-Customer
• Producer-Retailer-Customer
• Producer-Wholesaler-Retailer-Customer
• Producer-Agent-Wholesaler-Retailer-
Customer

4. Producer-Customer
• This is the simplest and shortest channel in
which no middlemen is involved and
producers directly sell their products to the
consumers. It is fast and economical channel
of distribution. Under it, the producer or
entrepreneur performs all the marketing
activities himself and has full control over
distribution.

5. Producer-Retailer-Customer
• This channel of distribution involves only one
middlemen called 'retailer'. Under it, the
producer sells his product to big retailers (or
retailers who buy goods in large quantities)
who in turn sell to the ultimate consumers.

6. Producer-Wholesaler-Retailer-
Customer
• This is the most common and traditional
channel of distribution. Under it, two
middlemen i.e. wholesalers and retailers are
involved. Here, the producer sells his product
to wholesalers, who in turn sell it to retailers.
And retailers finally sell the product to the
ultimate consumers.

7. Producer-Agent-Wholesaler-Retailer-
Customer
• This is the longest channel of distribution in
which three middlemen are involved. This is
used when the producer wants to be fully
relieved of the problem of distribution and
thus hands over his entire output to the
selling agents. The agents distribute the
product among a few wholesalers. Each
wholesaler distribute the product among a
number of retailers who finally sell it to the
ultimate consumers.

8. Factors consider while selecting
distribution channel
• Product Consideration
• Market Consideration
• Other Considerations

9. Product Consideration
• The type and the nature of products
manufactured is one of the important elA new
product needs greater promotional efforts in
the initial stages and hence few middlemen
may be required.
ements in croducts of low unit value and of
common use are generally sold through
middlemen.hoosing the distribution channel.

10. Market Consideration
• Another important factor influencing the
choice of distribution channel is the nature of
the target market. If the number of
prospective customers is small or the market
for the product is geographically located in a
limited area, direct selling is more suitable.
While in case of a large number of potential
customers, use of middlemen becomes
necessary.

11. Other Considerations
• There are several other factors that an
entrepreneur must take into account while
choosThe distribution costs of each channel is
also an important factor because it affects the
price of the final product. Generally,a less
expensive channel is preferred. But
sometimes, a channel which is more
convenient to the customers is preferred even
if it is more expensive.ing a distribution
channel.

12. Distribution Channels